Voici la traduction en anglais du texte, en respectant la même structuration et la même mise en page :

How to smoothly transfer a real estate holding company?

A real estate holding (or management) company aims to grow a real estate portfolio while balancing yield and risk management. Answering to both entrepreneurial and family logic, it is a fully-fledged business. However, it presents specific characteristics that must be anticipated when preparing for a transfer.

Diverse origins and motivations

Several objectives can lead to the creation of a real estate holding company:

  • Separation between operational assets and real estate assets: this structure protects land and property assets and prepares for a balanced succession.

  • Building an active and diversified investment portfolio: managed like a private property firm (foncière), it aims for long-term profitability and asset appreciation, driven by leverage and dynamic rental management.

  • Collective management of family assets: organizing joint ownership of real estate avoids joint tenancy (indivision), clarifies rights, and ensures sustainable governance.

Succession or sale

With a long-term perspective, a real estate holding company is most often intended to be transferred within the family rather than sold. Certain circumstances may nevertheless lead shareholders to consider a partial or total sale: liquidity needs, lack of interest among heirs for management, family disagreements, or fears of tension.

In these situations, the decision to sell requires a fine analysis of the portfolio's strengths and weaknesses, as well as clear reflection on transfer goals. The challenge is to put oneself in the shoes of a buyer, who will approach the deal with a purely economic eye.

The main factors to take into account are :

  • Portfolio quality: the condition of the properties and their location determine the portfolio's strength. It is essential that administrative and urban planning aspects are clear and complete. Environmental criteria (energy performance, insulation, EPC certificate) now hold a central position.

  • Debt level and structure: the burden of debt—amount, interest rates, guarantees, and maturities—directly influences profitability and risk. Well-managed debt can create a positive leverage effect, whereas an overly heavy debt structure weakens the company.

  • Asset homogeneity: when properties feature different typologies (residential, commercial, industrial, agricultural land) or are located in very distinct areas, overall valuation may be affected. In some cases, selling off assets individually (à la découpe) may be justified to maximize value.

  • Leases and rental income: tenant quality and lease structures (occupancy rates, remaining duration, clauses, unpaid rent) dictate the stability and predictability of cash flows.

  • Operational management: rigor in technical and administrative management (maintenance, lease tracking, reporting) has a direct impact on the long-term performance and value of the portfolio.

Two approaches to assessing real value

Valuation methods must be adapted to the specificities of a real estate holding company. Two main approaches are generally used:

  • Net Asset Value (NAV / ANR): the reference method for this type of entity, it consists of revaluing properties to their market value and comparing it to book value to calculate the gross capital gain. A discount for latent tax liability is then applied, representing the tax that would be due if the assets were sold. The resulting net capital gain is added to equity to determine Net Asset Value, a key indicator of the shares' economic value.

  • Yield-based valuation: the real estate portfolio is valued based on the income it generates, divided by a capitalization rate. A simplified method, based on gross rent, provides a quick and frequently used—yet imprecise—estimate. The more professional method consists of capitalizing real estate EBITDA (rents net of operating charges, maintenance, management, and insurance).

These two valuation methods are complementary. Net Asset Value relies on the market value of the properties, whereas yield-based valuation provides a more economic perspective that reflects operational realities. A savvy investor will combine both approaches to estimate a fair, defensible valuation that integrates both held assets and the company's operational performance.

Ultimately, the real estate holding company, often perceived as a stable asset, reveals its full complexity during a sale process. Its valuation and transfer require just as much rigor as selling an operating business.

Article originally published in La Libre Économique by Tanguy della Faille, Partner at Fondaris, on 18/11/2025. Published/updated version on the Fondaris website with the author's permission.